Critics are concerned the sale of petro crytocurrency nothing more than a debt issuance by Venezuela. 

Venezuelan government hopes Petro Cryptocurrency will help relieve economic crisis

Venezuelan President Nicolas Maduro said on Tuesday that next week, on Feb. 20, there will be a pre sale of the country’s new petro currency.

The government of the beleaguered South American nation is hoping the introduction of the petro currency will help alleviate the current economic crisis.

Critics say the plan is illegal and nothing more than a debt issuance by the Maduro government desperate to calm it citizens who are suffering due to major food shortages and reign in quadruple-digit inflation.

In the past, Maduro said Venezuela will issue 100 million tokens, each will be valued at, and backed by, the equivalent of one barrel of Venezuelan crude oil.

According to Reuters, that would make the value of the entire petro cryptocurrency issuance at just over $6 billion.

“All the cryptocurrencies of the world have been revalued after Venezuela’s announcements about the creation of the petro,” Reuters reports Maduro said in a speech broadcast on state television.

The Maduro government says the petro issue will help Venezuela make financial transactions and overcome US sanctions imposed against the socialist government.

But, the US warned investors about the petro currency earlier this month, saying transactions of petro could contravene sanctions because “the petro digital currency would appear to be an extension of credit to the Venezuelan government.”

Venezuelan opposition party says it is illegal to use oil reserves to issue debt.  At 297 billion barrels, Venezuela has the largest proven oil reserves in the world.

In the last month, the price of one bitcoin has fallen significantly, raising concerns about the security of virtual currencies.

As well, late last month, hackers made off with more than half a billion dollars from Tokyo-based cryptocurrency exchange Coincheck Inc.